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Marine Log

June 3, 2008

Strategic Marine to build crew boats on spec

Australian shipbuilder Strategic Marine says it is "making the most of the current high demand for offshore vessels" by building eight aluminum crew boats on a speculative basis.

In a move that it expects to boost its revenues by over US$40 million, the company will build six 40 m vessels at its Singapore shipyard, and two 52 m crew boats at its new Mexican yard at Mazatlan.

Western Australian marine services company Samson Maritime has already ordered two of the new 40m crew boats after signing a contract worth US$9.8 million.

The two utility vessels, which will be delivered in May and June next year, have top speeds in excess of 25 knots and will be used by Samson Maritime to service its clients in the Pilbara region.

Strategic Marine Director Ron Anderson said the company had decided to build on spec because with four shipyards up and operating worldwide it had the added capacity to meet buoyant global demand from the offshore market.

"Offshore vessels come third in terms of vessels on order globally, behind tankers and cargo ships, making up about 15 percent of the international shipbuilding industry's business. What's more, crew boat demand far exceeds supply," Mr Anderson said.

"Our Singapore yard has specialized in building crew boats since opening in 2005, having received orders for almost 22 of these types of vessel."

"We have built eight out of nine 40 m offshore utilities on order for repeat Malaysian client Syarikat Borcos Shipping, with the seventh vessel being delivered to Borcos seven weeks ahead of schedule, which is very unusual for the industry," he said.

The Singapore yard is also expected to deliver three 22.1m crew boats to Dutch client SMIT International by the end of this year, as well as four 31m crew boats to Indonesia's Baruna Raya Logistics early next year.

The Mexican yard opened earlier this year after winning a US$13.35 million contract to build two 52 m aluminum crew boats for Blue Marine's Pemex supply contract in the Gulf of Mexico. Work on the two speculative vessels with the same specifications will get under way early next year.

"We have built up the experience and technical skills to undertake continuous production of standard hull forms for various types of vessels," Mr Anderson said.

"The rationale for this approach is shorter lead times for delivery, standard vessel designs that can be serviced economically, and lower overall costs to the purchaser due to the economies of scale we are able to achieve," he said.

Strategic Marine has received orders for around 130 vessels over the last two-and-a-half years, valued at more than US$250 million.

If, as expected, Strategic signs contracts for the remaining six crew boats it will build, its order book is likely to reach close to US$300 million.

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